What are the potential risks associated with relying on referrals to leasing or financing companies for a Carvel franchise as described in Item 10?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation.
We may refer you to leasing or financing companies not affiliated with us. We and our affiliates receive no fees or other financial benefits from any lender for your financing. We may engage an advisor to provide consulting services to franchisees to assist them with securing financing, and we may pay the advisor for this assistance to franchisees. We will not be responsible for the consultant's provision of services to you and if you choose to use the consultant, you must sign the consultant's form of agreement. You will not be required to participate in any financing program that we implement.
We participate in the SBA's Franchise Directory. We may modify the Franchise Agreement, if necessary, to comply with SBA requirements for you to participate in certain SBA loan programs.
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Item 10 states that Carvel does not offer direct or indirect financing and does not guarantee any franchisee's financial obligations. While Carvel may refer franchisees to leasing or financing companies, these companies are not affiliated with Carvel. This means that Carvel franchisees must conduct their own due diligence when considering these financing options.
Carvel and its affiliates do not receive any fees or financial benefits from lenders for franchisee financing. Carvel may engage an advisor to assist franchisees in securing financing and may pay the advisor for this assistance. However, Carvel will not be responsible for the consultant's services, and franchisees must sign the consultant's agreement if they choose to use their services. This arrangement means that Carvel franchisees must evaluate the advisor independently and understand the terms of their agreement.
Carvel participates in the SBA's Franchise Directory and may modify the Franchise Agreement to comply with SBA requirements for franchisees participating in certain SBA loan programs. This could be beneficial for franchisees seeking SBA-backed financing, but it also means that the Franchise Agreement could be subject to change to meet SBA requirements. Franchisees are not required to participate in any financing program implemented by Carvel, allowing them the flexibility to seek financing options that best suit their needs.